More specifically, Hotknot will use a touch sensor chip to send communication protocols, while a gravity sensor (G-sensor) ensures the actual contact, and a proximity sensor (P-sensor) detects the presence of nearby objects, thus verifying that the two objects are close enough.

"What NFC can do, Hotknot can also do," HaoJung Li, product marketing manager of MediaTek's wireless communications business unit, told us Tuesday in an interview here.

By usurping NFC, MediaTek is illustrating its growing confidence in the global market. The company wants to be seen as a leader, rather than a follower, by establishing a new spec and driving a new technology into the mobile world.

All-out war against NFC?
But with Hotknot, is MediaTek declaring an all-out war against NFC?

Not necessarily.

Although the Taiwan-based company certainly hopes to make Hotknot a globally accepted proximity technology over time, its approach will be gradual and practical.

Hotknot will start in China, where MediaTek has a sizeable market share among chips designed into smartphones. Hotknot's application will be initially limited to device pairing.

MediaTek, however, has its sights set on a clear opening for Hotknot in smartphones. The opportunity is there despite NFC's global presence in applications such as identification cards and mobile payments, and because NFC's penetration in smartphones has been slow in coming and still rather limited.

Li estimates only 10 percent of smartphones sold in China are integrated with NFC.

NFC promoters initially drove the technology by leveraging the secure element baked into the NFC chip.

In contrast, MediaTek's game plan is to get Hotknot designed into smartphones "almost free," while emphasizing the "fun" elements of physical touch, and promoting its ability to "pair everything" among consumers, explained Li. MediaTek hopes to add Hotknot to a broad range of consumer devices including smartphones, tablets, wearable devices, and even TVs, all of which are MediaTek strongholds as a platform vendor.

MediaTek knows that the mobile wallet will need to become a key application for Hotknot -- over time.

The video doesn't quite show what is the great features that Hotknot delivers while NFC couldn't. To me, it comes down to the choice between literally touch vs proximity. I prefer the latter that NFC delivers.

On the other hands, BLE is aiming the eWallet market as well. It might be interesting to compare all 3 techologies and rate their pros and cons.